A pigmy deposit is a savings account where the bank comes to you. An authorised agent visits your home or shop on a fixed route, collects a small amount in cash, records it, and gives you a receipt. The money earns interest and is paid out at maturity.
The name comes from the original scheme: Syndicate Bank launched the Pigmy Deposit Scheme in Udupi, Karnataka, on 8 October 1928, collecting amounts as small as two annas from fisherwomen and small traders. Syndicate Bank merged into Canara Bank in 2020, and the product continues there as the Nitya Nidhi Deposit.
Who offers pigmy deposits today
The model spread far beyond one bank. You will find pigmy or daily-deposit schemes at:
- Urban co-operative banks such as Cosmos Bank, which accepts between ₹100 and ₹5,000 a day.
- District central co-operative banks, especially in Karnataka.
- Credit co-operative societies and patpedhis in Maharashtra, often with minimums as low as ₹5 a day.
- Souharda co-operatives in Karnataka.
- Nidhi companies, most of them in Tamil Nadu.
- Canara Bank, through the Nitya Nidhi Deposit.
How the money moves
- You open the account with the usual identity and address proof and receive a passbook.
- The agent visits daily (some schemes allow weekly visits) and collects the amount you choose.
- You get a receipt on the spot: a passbook entry, a printed slip from a handheld machine, or an SMS from the agent's app.
- At the end of the day the agent deposits the cash at the branch, and the bank reconciles every entry.
- At maturity, typically 12, 24 or 36 months, the bank pays your balance plus interest. Canara Bank's scheme runs for 63 months.
What it pays
There is no single "pigmy rate". Institutions set their own, and the spread is wide. Every figure below is what the institution published on its own page, read on 9 September 2026.
| Institution | Rate published | Tenure | Deposit size |
|---|---|---|---|
| Canara Bank, Nitya Nidhi Deposit | 2.00% a year, paid at maturity | 63 months only | Min ₹50 a month, max ₹1,000 a day |
| Cosmos Bank (urban co-operative) | 3.00% a year | 12 months | ₹100 to ₹5,000 a day |
| Latur Urban Co-operative Bank | 2% after 1 year, 3% up to 2 years, 5% for 3 years | 12, 24 or 36 months | From ₹10 a day |
| Chikkamagaluru DCC Bank | 1.00% a year | 12 to 60 months | Min ₹100 |
One to five per cent across four institutions, and wider still once you look further: our fuller rate table spans 1% to 8% across nine institutions that publish a figure. Anyone who quotes you a pigmy rate without naming the bank and the date is guessing.
These rates are low compared with what the same banks pay on an ordinary deposit, and that is not an accident. We work through the gap, and what it buys, in pigmy deposit vs recurring deposit vs SIP.
What it costs
You do not usually pay a fee. The cost sits inside the rate.
The agent is paid a commission on what they collect. In Maharashtra that rate is capped: the Cooperation Department set it at 2.5% for credit co-operatives from 1 April 2026, then raised the cap to 3% in June 2026 after agents and their federations objected.
There is no national cap, and the Maharashtra figures are not a sector rate. One multi-state credit society publicly advertises 4.5% plus 0.5% to recruit agents. What your institution pays depends on its regulator and its own board policy.
Who bears that commission depends on the institution, and the distinction matters:
- Banks pay it themselves. It is a cost the bank carries, which is exactly why the rate on this product is lower than on a deposit nobody has to collect.
- Some credit societies may not. The chairman of Maharashtra's state federation of credit societies is on record that the commission is typically borne by customers rather than by the institutions. The mechanism is not documented anywhere we could find. If you hold an account at a society rather than a bank, ask.
Closing early is where the real cost appears. Chikkamagaluru DCC pays no interest at all on an account closed inside 12 months. Latur Urban deducts 5% of the deposit before six months. Canara reduces the interest by slab and adds a penalty inside 12 months. A pigmy account closed at nine months can return less than the cash you handed over.
Is your money insured?
This depends on what kind of institution holds it, and the difference is larger than most people expect.
Deposit insurance from the DICGC covers all state, central and primary co-operative banks, which includes urban co-operative banks, up to ₹5,00,000 per depositor per bank, counting principal and interest together. Recurring deposits are covered.
Primary co-operative societies are not. The DICGC states it directly: "Primary cooperative societies are not insured by the DICGC."
So two pigmy accounts that look identical, opened the same way with the same passbook, can differ completely on this point. One held at a licensed co-operative bank is insured. The same product at a patpedhi, a credit society or a Nidhi company is not. If you do not know which kind of institution holds your account, that is worth finding out before you increase your daily amount.
Five things to check on your own account
Most of what determines your outcome is not printed on the scheme leaflet. If you hold a pigmy account, or are about to open one, these are worth asking in writing.
- Is the institution a bank or a society? This decides whether your money carries deposit insurance, and it is the question with the largest consequence. See the section above.
- How is the interest actually applied? Daily balance, quarterly rests, or simple interest at maturity. Two schemes advertising the same percentage can pay different amounts. None of the four scheme pages in the table above states its method.
- What happens if you stop, or close early? Ask for the penalty in numbers, at six months and at twelve, not as a description.
- Does anything come out of your deposit? Ask whether the agent's commission is paid by the institution or deducted from what you hand over.
- How is your deposit recorded, and how fast? A passbook entry, a printed slip, or an instant message. Anything that leaves a same-day record you keep is better than a note in a book you never see again.
Is it worth it?
A pigmy deposit is not the highest-yield product available, and nobody should choose it expecting to be. Its value is access and discipline. It turns small daily cash into a lump sum without a trip to the branch, for people whose income arrives in notes and whose savings would otherwise be spent by the weekend.
That is a real service with a real cost, and the low rate is that cost. The product has lasted almost a century because the problem it solves has not gone away; we tell that story in the history of the pigmy deposit scheme.
If you already hold a bank account with a predictable monthly surplus, you are paying for a collection service you do not need, and the same institution will usually pay you more on an ordinary recurring deposit.
Nothing here is financial advice. Pigmity is an information site: it is not a bank, a society or a distributor, and it does not sell any of the products described.